1 George Mason School of Law Contracts I Promissory Estoppel F.H. Buckley [email protected].
Dec 15, 2015
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Estoppel
Estoppel by representation of fact
Promissory estoppel
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Estoppel: An Ideological Battle?
Oliver Wendell Holmes Samuel Williston Arthur Corbin
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Promisory Estoppel and RelianceA sword, not a Shield
Ricketts v. Scothorn
I assume you were as distressed as I was at this example of male chauvinism…
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Ricketts v. Scothorn
Was there consideration given by Katie for the promise? What was the reliance?
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Exam
Writing by laptop
Four questions, Two hours…
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What kind of reliance is needed?
Suppose I promise you $1,000,000 and, believing me, you purchase a new car. I renege. Have you relied? And would this ground a remedy?
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What kind of reliance is needed?
Suppose I promise you $1,000,000 and, believing me, you feel overjoyed. Have you relied?
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Psychic Reliance What happens when the cheque bounces tomorrow…
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Happy, Happy, Joy, Joy
What kind of reliance is needed?
Suppose I promise you $1,000,000, and have no intention of performing, but think it would be amusing to fool you.
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Haase v. Cardoza
Was the promise supported by consideration?
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Haase v. Cardoza
Was the promise supported by consideration?
What about reliance?
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Haase v. Cardoza
What about reliance?
The former restatement provided for no relief unless the reliance was “definite and substantial.” What is the effect of the change?
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Haase v. Cardoza
What about reliance?
Present Restatement § 90 conditions relief: “injustice can be avoided only by enforcement.” What does that mean?
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Wright v. Newman (p. 160)
How would you decide this?
What was the reliance?
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Why might a promisor want to incur legal liability?
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Why might a promisor want to incur legal liability?
And why might he not? In a case such as Haase…
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Why might a promisor want to incur legal liability?
And why might he not? Cf. Ricketts
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Why might a promisor want to incur legal liability?
And why might he not? Cf. Ricketts How would you expect promisors to
react, in an interfamily setting, if all promises were enforceable.
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Why might a promisor want to incur legal liability?
And why might he not? How would you expect promisors to
react, in an interfamily setting, if all promises were enforceable. Fewer promises Conditional promises
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Why might a promisor want to incur legal liability?
And why might he not? Might promisees sometimes be better off
if family promises are not enforceable?
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The Employment Context
Feinberg v. Pfeiffer What was the promise and why was it
made?
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The Employment Context
Feinberg v. Pfeiffer What was the promise and why was it
made? What was the reliance?
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The Employment Context
Feinberg v. Pfeiffer What was the promise and why was it
made? What was the reliance?
What it relevant that she discovered she had cancer?
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Why a different result in Hayes?
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Why a different result in Hayes?
Feinberg retired after the promise; Hayes decided to retire before the promise, and retired a week after it was made
No formal provision, no board resolution
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Why a different result in Hayes?
Did Hayes have a bad lawyer?
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Why a different result in Hayes?
Did the promisors intend to assume legal liability in this case? In Feinberg?
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Chartiable Subscriptions
Salsbury v. Northwestern Bell
Charles City College operated from 1967 to 1968. It welcomed unconventional students who had not seen success at other colleges. It [was] also attended by a substantial number of young men seeking draft deferments that would allow them to avoid military service during the Vietnam War. (Wikipedia)
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Chartiable Subscriptions
You and I meet and agree that we will both donate $5,000 to a college Consideration?
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Chartiable Subscriptions
I pledge $1,000,000 to a college which promises to name a building after me Consideration? Allegheny College
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Allegheny College
Chartiable Subscriptions
Salsbury v. Northwestern Bell Did Salsbury rely on the subscription? Restatement § 90(2)
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Chartiable Subscriptions
Salsbury v. Northwestern Bell Are you satisfied with the rationale?
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Charitable Subscriptions
Can you reconcile Salsbury with DeLeo?
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Charitable Subscriptions
Can you reconcile Salsbury with DeLeo? Illness Fiduciary relationship Oral promise Storage room?
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Charitable Subscriptions
Should such promises automatically be binding? Is that what 90(2) requires?
Comment f
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Charitable Subscriptions
Why so few such cases?
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The Material Benefits Rule
Webb v. McGowin p. 191
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W.T. Smith Lumber Co., Chapman AL
The Material Benefits Rule
Webb v. McGowin
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J. Greeley McGowin
The Material Benefits Rule
Webb v. McGowin Recall Bailey v. West
Is Webb a suitable case for relief in quasi-contract?
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The Material Benefits Rule
Webb v. McGowin Recall Bailey v. West
Is Webb a suitable case for relief in quasi-contract?
What did the promise add?
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The Material Benefits Rule
Webb v. McGowin Treat this as a contracts case. Is there a
consideration problem?
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The Material Benefits Rule
Webb v. McGowin Treat this as a contracts case. Is there a
consideration problem? The past consideration rule
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The Material Benefits Rule
Webb v. McGowin Treat this as a contracts case. Is there a
consideration problem? The past consideration rule The material benefits rule:
Restatement § 86
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The Material Benefits Rule
Webb v. McGowin Can you distinguish it from Mills v.
Wyman: p.192?
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The Material Benefits Rule
Webb v. McGowin Can you distinguish it from Mills v.
Wyman? What about Boothe v. Fitzpatrick (p. 198)
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The Material Benefits Rule
Previously binding promises Restatement § 82
Statute of Limitations Restatement § 83
Debt discharged in bankruptcy Restatement § 85
Voidable duties
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The Material Benefits Rule
Pitching ideas: Desny v. Wilder p. 193
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The Material Benefits Rule
Pitching ideas: Desny v. Wilder Was this a valid contract?
What would the implied terms be? What if the secretary had not promised?
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Irrevocable Offers
The consideration requirement amounts to a presumption against irrevocable offers Why does this make sense?
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Irrevocable Offers
The consideration requirement amounts to a presumption against irrevocable offers When doesn’t it make sense?
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Irrevocable Offers
The consideration requirement amounts to a presumption against irrevocable offers What purposes are served by option
contacts?: Restatement §§ 25, 37, 87(1)
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Irrevocable Offers
The consideration requirement amounts to a presumption against irrevocable offers What purposes are served by option
contacts? Hedging strategies
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Irrevocable Offers
The consideration requirement amounts to a presumption against irrevocable offers What purposes are served by option
contacts? Compensation schemes
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Irrevocable Offers
The consideration requirement amounts to a presumption against irrevocable offers What purposes are served by option
contacts? Land assembly and hold-outs
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Irrevocable Offers
The consideration requirement amounts to a presumption against irrevocable offers What purposes are served by option
contacts? Pre-contractual reliance expenditures
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Irrevocable Offers
The Brooklyn Bridge example: p. 232
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Irrevocable Offers
Legal restrictions on the right to revoke an offer? Revocation not effective unless communicated:
Restatement § 40
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Irrevocable Offers
Legal restrictions on the right to revoke an offer? Revocation not effective unless communicated:
Restatement § 40 Full performance of unilateral contract: St. Peter
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Irrevocable Offers
Legal restrictions on the right to revoke an offer? Revocation not effective unless communicated:
Restatement § 40 Full performance of unilateral contract: St. Peter Acceptance through part performance: Restatement §
34(2)
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Irrevocable Offers
Legal restrictions on the right to revoke an offer? Revocation not effective unless communicated:
Restatement § 40 Full performance of unilateral contract: St. Peter Acceptance through part performance: Restatement §
34(2) Acceptance through reliance: Restatement § 34(3)
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Irrevocable Offers
Legal restrictions on the right to revoke an offer? Revocation not effective unless communicated:
Restatement § 40 Full performance of unilateral contract: St. Peter Acceptance through part performance: Restatement §
34(2) Acceptance through reliance: Restatement § 34(3) Promissory Estoppel: Restatement § 90
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Irrevocable Offers
Legal restrictions on the right to revoke an offer? Revocation not effective unless communicated:
Restatement § 40 Full performance of unilateral contract: St. Peter Acceptance through part performance: Restatement §
34(2) Acceptance through reliance: Restatement § 34(3) Promissory Estoppel: Restatement § 90 Collateral option contract: Restatement § 45
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Irrevocable Offers
Legal restrictions on the right to revoke an offer? Are all of these consistent with the idea that the
offeror’s intention to create legal relations is determinative?
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Irrevocable Offers
Legal restrictions on the right to revoke an offer? Firm offers under UCC § 2-205
Is this related in any way to offeree reliance?
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Construction Contracts
Client
General Contractor
Sub-contractor
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Pavel v. Johnson p. 234
NIH
PEI (Pavel/HVAC)
Johnson (Kick)
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Pavel v. Johnson
Aug. 5: subcontractor bids Aug. 26: PEI asks Johnson for fresh bid
breaking out Powers project Aug. 30: PEI “accepts” Johnson’s bid Sept. 1: Johnson notes an error and
seeks to withdraw bid Sept. 2: PEI affirms contract Sept. 28: NIH awards contract to PEI
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Pavel v. Johnson
Did Johnson have the right to revoke its offer? Contingent option contract under which
the subcontractors could not withdraw if PEI was awarded the contract by NIH, but could withdraw prior thereto
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Pavel v. Johnson
Did Johnson revoke its offer? Had it the right to do so?
Contingent option contract under which the subcontractors could not withdraw if PEI was awarded the contract by NIH, but could withdraw prior thereto
Was this unfair to PEI?
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Pavel v. Johnson
Did Johnson revoke its offer? Had it the right to do so?
Was there sufficient detrimental reliance to raise a promissory estoppel?
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Pavel v. Johnson
Did Johnson revoke its offer? Had it the right to do so?
Was there sufficient detrimental reliance to raise a promissory estoppel? What was the relevance of the Aug. 26 fax
on the POWERS breakout.
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Pavel v. Johnson
Did Johnson revoke its offer? Had it the right to do so?
Was there sufficient detrimental reliance to raise a promissory estoppel? Baird v. Gimbel: subcontractor withdraws
two days before contractor awarded the contract
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Pavel v. Johnson
Did Johnson revoke its offer? Had it the right to do so?
Was there sufficient detrimental reliance to raise a promissory estoppel? Where subcontractor withdraws a month
before contractor is awarded the contract, what is the latter to do?
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Pavel v. Johnson
Did Johnson revoke its offer? Had it the right to do so?
Was there sufficient detrimental reliance to raise a promissory estoppel? If the subcontractor is locked in, can the
contractor shop around?
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Pavel v. Johnson
Did Johnson revoke its offer? Had it the right to do so?
You are the subcontractor. How do you protect yourself in such cases?
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Good luck!
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